OFGEM have just opened a new and important consultation on how they should respond as a regulator to the emergence of ‘Non-Traditional Business Models’ or NTBMs. The consultation will close on 20 May 2015.

OFGEM are saying: “We want to ensure that regulation isn’t getting in the way of organisations delivering desirable consumer outcomes. But, because energy is an essential service, we must also protect the interests of existing and future electricity and gas consumers. And this means we need to understand the benefits, costs and risks of any change to regulation.”
“We have identified four important drivers motivating the emergence of these NTBMs:
• The low carbon transition
• Rapid technological innovation
• Lack of consumer engagement and trust
• Greater focus on affordability and especially on supporting consumers in vulnerable situations. “
“We have grouped these NTBMs into three broad themes:
• Local energy services (eg community energy)
• Bundled services (eg energy service companies)
• Customer participation (eg peer-to-peer energy).
Some NTBMs could also challenge the fundamentals of current regulatory arrangements. For example, some are seeking to generate and supply energy locally, which, at sufficient market penetration, could challenge the centralised way in which the energy market operates.”